New US photo voltaic tariffs on Southeast Asia to boost costs, reduce revenue margins

By Colleen Howe

BEIJING (Reuters) – A brand new spherical of U.S. photo voltaic panel import tariffs on Southeast Asian producers is anticipated to boost shopper costs and reduce into producer revenue margins, however was largely anticipated by trade, analysts mentioned.

The brand new duties introduced on Friday by the Commerce Division lengthen the US’ anti-dumping regime in Southeast Asia to photo voltaic cells, from simply completed modules beforehand.

The tariff rise was largely consistent with expectations, Citi analyst Pierre Lau mentioned in a word, including that in the long term, the duties would encourage extra manufacturing in the US, changing imports.

“PRC module makers typically assume the affect restricted close to time period, assuming a lot of the incremental value can be handed by to U.S. prospects with out options,” he added, nonetheless.

The willpower is the second in a commerce case introduced by a bunch of corporations, together with South Korea’s Hanwha Qcells and First Photo voltaic (NASDAQ:FSLR), accusing Chinese language corporations of unfairly promoting below-cost photo voltaic parts into the U.S.

Affected producers might supply cells from Laos and Indonesia as a substitute, or take the reduce out of their revenue margins, mentioned Yana Hryshko, head of worldwide photo voltaic provide chain analysis at consultancy WoodMackenzie.

“They wish to keep aggressive for the U.S. market,” mentioned Hryshko. “The precise manufacturing value in Southeast Asia just isn’t that prime in comparison with the costs that they’re promoting to the US.”

Chinese language-owned photo voltaic crops have already popped up in Indonesia and Laos, the important thing Southeast Asia manufacturing bases not but lined by tariffs, though trade consultants say they could be added as soon as export volumes improve.

Within the case of tariffs on Indonesia, the brand new capability might be redirected into the burgeoning home market, nonetheless, Hryshko added, supported by native content material necessities.

Some 80% of America’s photo voltaic imports, which hit a document $15 billion final yr, got here from Cambodia, Malaysia, Thailand and Vietnam in 2023.

The Commerce Division calculated anti-dumping charges of 271.28% for imports from Vietnam, 125.37% for Cambodia, 77.85% for Thailand and 21.31% for Malaysia, whereas main producers have their very own company-specific charges.

America makes up simply 4% to 10% of main Chinese language module makers’ gross sales volumes, however the next share of their earnings, in keeping with Citi.

The commerce division’s closing order will likely be launched on April 18, when the proposed duties might be revised.